Finance Bill

Session 2013 - 14
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Finance Bill

Finance Bill
Schedule 27 — Manufactured payments
Part 3 — Consequential etc amendments
368

(i)
a government, local authority or other public
authority of a territory outside the United Kingdom,
or
(ii)
another non-UK resident body of persons,

and includes shares in a non-UK resident company,
5
(b)
“overseas dividend” means any interest, dividend or other
annual payment payable in respect of overseas securities,
and
(c)
“UK securities” means securities of—
(i)
the government of the United Kingdom,
10
(ii)
a local authority in the United Kingdom,
(iii)
another public authority in the United Kingdom, or
(iv)
a UK resident company or other UK resident body,

but does not include shares in a UK resident company.”
20
In section 658 (powers to modify: supplementary), for subsection (5)
15
substitute—
“(5)
Subsections (6) to (10) apply for the purposes of sections 656 and 657
and this section.
(6)
“UK shares” means shares in a UK resident company.
(7)
“UK securities” means securities of—
20
(a)
the government of the United Kingdom,
(b)
a local authority in the United Kingdom,
(c)
another public authority in the United Kingdom, or
(d)
a UK resident company or other UK resident body.
(8)
But “UK securities” does not include UK shares.
25
(9)
“Overseas securities” means shares, stock or other securities issued
by—
(a)
a government, local authority or other public authority of a
territory outside the United Kingdom, or
(b)
another non-UK resident body of persons.
30
(10)
“Overseas securities” includes shares in a non-UK resident
company.”
21
In section 918(1) (manufactured dividends on UK shares: REITs), for
paragraph (a) substitute—
“(a)
a person pays a manufactured payment as mentioned in
35
section 614ZC(1) and the amount payable is representative of
a dividend (a “manufactured dividend”), and”.
22
In section 919 (manufactured interest on UK securities)—
(a)
for subsection (1) substitute—
“(1)
This section applies if—
40
(a)
a person pays a manufactured payment as mentioned
in section 614ZC(1),
(b)
the amount payable is representative of interest on
UK securities (“manufactured interest”), and
(c)
the person —
45

Finance Bill
Schedule 27 — Manufactured payments
Part 3 — Consequential etc amendments
369

(i)
is UK resident, or
(ii)
pays the manufactured interest in the course
of a trade carried on in the United Kingdom
through a branch or agency.”,
(b)
in subsection (4), omit the words from “section 583” to “special
5
cases)”, and
(c)
after subsection (5) insert—
“(6)
In subsection (1) “UK securities” means securities of—
(a)
the government of the United Kingdom,
(b)
a local authority in the United Kingdom,
10
(c)
another public authority in the United Kingdom, or
(d)
a UK resident company or other UK resident body.
(7)
But “UK securities” does not include shares in a UK resident
company.
(8)
In this section “securities” includes loan stock or any similar
15
security.”
23
Omit section 920 (foreign payers of manufactured interest: the reverse
charge).
24
In section 921 (cases where interest on underlying securities paid gross), in
subsection (3), for the words from ““securities”” to the end substitute
20
““manufactured interest” has the same meaning as in section 919.”
25
Omit sections 922 to 925 (manufactured overseas dividends).
26
In section 925A(2) (creditor repos), for “to 925” substitute “, 919 and 921”.
27
Omit section 925B (debtor repos).
28
In section 925C (actual payments ignored)—
25
(a)
in the heading, omit “or 925B”,
(b)
omit “or 925B(2)”, and
(c)
for “to 925” substitute “, 919 and 921”.
29
In section 926 (interpretation of Chapter 9 of Part 15), omit subsections (1)
and (1A).
30
30
In Schedule 1 (minor and consequential amendments), omit paragraph
335(1) to (4) and (6) to (8).
31
In Schedule 2 (transitionals and savings), omit paragraphs 108 to 111 (and
the headings “Part 12”, “Manufactured payments and repos” and “Tax
credits: stock lending arrangements and repos” immediately preceding
35
paragraph 108).
32
In Schedule 4 (index of defined expressions), omit the entries for—
“buying back securities, in the context of a repo (in Part 11)”,
“company UK REIT (in Chapter 2 of Part 11)”,
“gross amount (in Chapter 2 of Part 11)”,
40
“group (in Chapter 2 of Part 11)”,
“group UK REIT (in Chapter 2 of Part 11)”,
“manufactured dividend (in Chapter 2 of Part 11)”,
“manufactured dividend (in Chapter 3 of Part 11)”,

Finance Bill
Schedule 27 — Manufactured payments
Part 3 — Consequential etc amendments
370

“manufactured interest (in Chapter 2 of Part 11)”,
“manufactured overseas dividend (in Chapter 2 of Part 11)”,
“overseas dividend (in Part 11)”,
“overseas dividend (in Chapter 9 of Part 15)”,
“overseas securities (in Part 11)”,
5
“overseas tax (in Chapter 2 of Part 11)”,
“overseas tax (in Chapter 9 of Part 15)”,
“overseas tax credit (in Chapter 2 of Part 11)”,
“prescribed (in Chapter 2 of Part 11)”,
“principal company (in Chapter 2 of Part 11)”,
10
“principal company (in Chapter 9 of Part 15)”,
“property rental business (in Chapter 2 of Part 11)”,
“property rental business (in Chapter 9 of Part 15)”,
“related agreements (in Part 11)”,
“relevant withholding tax (in Chapter 2 of Part 11)”,
15
“repo (in Part 11)”,
“the rules about manufactured payments (in Chapter 4 of Part 11)”,
“stock lending arrangement (in Part 11)”,
“trade carried on through a branch or agency (in Chapter 2 of Part 11)”,
“transfer (in Chapter 2 of Part 11)”,
20
“UK securities (in Part 11)”, and
“UK shares (in Part 11)”.
FA 2008
33    (1)
FA 2008 is amended as follows.
      (2)
In Schedule 12 (tax credit for certain foreign distributions), omit paragraphs
25
26, 27(2)(a) and (c) and (3), 28(2)(a) and (c) and (3), 29(2)(a), (c)(i) and (d) and
(3) and 30.
      (3)
In Schedule 23 (manufactured payments: anti avoidance), omit paragraphs
1 to 4, 6, 7 and 9 to 11.
CTA 2009
30
34
CTA 2009 is amended as follows.
35
In section 539 (introduction to Chapter about manufactured interest), omit
subsection (7).
36
In section 540(3) (manufactured interest treated as interest under loan
relationship), omit “and to section 799 of CTA 2010”.
35
37
In section 550 (which makes provision about the effect of the sale of
securities on a borrower)—
(a)
in subsection (4), for “(6)” substitute “(5C)”,
(b)
after subsection (5A) insert—
“(5B)
Nothing in subsection (3) entitles the borrower to double
40
taxation relief in respect of any income payable in respect of
overseas securities.

Finance Bill
Schedule 27 — Manufactured payments
Part 3 — Consequential etc amendments
371

(5C)
But nothing in subsection (3) affects the entitlement of the
borrower to double taxation relief in respect of any overseas
tax deducted from any amount representative of income
payable in respect of overseas securities.
(5D)
In subsection (5C) “overseas tax” means tax under the law of
5
a territory outside the United Kingdom.”, and
(c)
omit subsection (6).
38
In section 1221(1) (amounts treated as expenses of management), for
paragraph (i) substitute—
“(i)
section 814C(5) of CTA 2010 (treatment of payer of
10
manufactured dividend),”.
39
In section 1248 (expenses in connection with arrangements for securing a tax
advantage)—
(a)
omit subsection (3), and
(b)
in subsection (5), omit the definition of “relevant tax relief”.
15
FA 2009
40
In Schedule 19 to FA 2009 (income tax credits for foreign distributions), omit
paragraphs 4 and 13(b).
CTA 2010
41
CTA 2010 is amended as follows.
20
42
In section 1 (overview of Act), in subsection (4)—
(a)
omit paragraph (d), and
(b)
before paragraph (e) insert—
“(da)
manufactured dividends (see Part 17A),”.
43
Omit Part 17 (manufactured payments and repos).
25
44    (1)
Section 1109(5) (provisions to which section 1109 is subject) is amended as
follows.
      (2)
Omit paragraphs (a) to (c) (and the word “and” at the end of paragraph (c)).
      (3)
Immediately before subsection (5)(d) insert—
“(ca)
section 814D (no tax credits for recipient of manufactured
30
dividend), and”.
45
In Schedule 1 (minor and consequential amendments), omit paragraphs 259,
537, 538, 539(b) and (c), 635, 636 and 689(a) and (b)(i).
46
In Schedule 2 (transitionals and savings), omit Part 17 (manufactured
payments and repos).
35
47
In Schedule 4 (index of defined expressions), omit the entries for—
“creditor quasi-repo (in Chapter 5 of Part 17)”,
“creditor repo (in Chapter 5 of Part 17)”,
“debtor quasi-repo (in Chapter 5 of Part 17)”,
“debtor repo (in Chapter 5 of Part 17)”,
40
“manufactured dividend (in Part 17)”,

Finance Bill
Schedule 27 — Manufactured payments
Part 4 — Commencement
372

“manufactured overseas dividend (in Part 17)”,
“overseas dividend (in Part 17)”,
“overseas securities (in Part 17)”,
“overseas tax (in Part 17)”,
“prescribed (in Chapter 4 of Part 17)”,
5
“stock lending arrangement (in Chapter 5 of Part 17)”, and
“UK shares (in Part 17)”.
TIOPA 2010
48    (1)
TIOPA 2010 is amended as follows.
      (2)
In section 85A(4) (schemes involving deemed foreign tax), omit paragraph
10
(b) of the definition of “real foreign tax”.
      (3)
In Schedule 7 (miscellaneous relocations), omit paragraph 113.
      (4)
In Schedule 8 (minor and consequential amendments), omit paragraph 82.
FA 2011
49
In Schedule 13 to FA 2011 (profits of foreign permanent establishments),
15
omit paragraphs 22 to 24.
FA 2012
50    (1)
FA 2012 is amended as follows.
      (2)
Omit section 22 (treatment of the receipt of manufactured overseas
dividends).
20
      (3)
In section 78(3) (amounts which are deemed BLAGAB management expense
for accounting period), for “783(6), 785(4) or 791(6)” substitute “814C(7)”.
      (4)
In Schedule 16 (minor and consequential amendments), omit paragraphs
220 to 223.
Part 4
25
Commencement
51
The amendments made by Parts 1 and 2 of this Schedule have effect in
relation to any payment representative of a dividend or interest which is
made on or after 1 January 2014.
52
The amendments made by Part 3 of this Schedule come into force on that
30
date.